Let me put this in a story. 

A rich man goes to the art store and gives the owner a $1,000 cheque deposit so he could find him an expensive painting. The art store owner goes to the school and pays an overdue $1,000 for his son’s tuition with the cheque by endorsing it. The school accountant calls his supplier and gives him the cheque for a pending account of $1,000. The supplier then goes to the factory and settles $1,000 due on supply manufacturing with the same cheque. The factory owner then goes to the art store and pays the $1,000 cheque due for his home decoration. Then the rich man comes back to the art store, doesn’t like any painting, takes the $1,000 cheque and goes. 

None of these people are indebted anymore. The business cycle has been completed. But a highly debt-based economy is heavy and non-productive. An economy where people (who, even though might have cash) have the habit of working with debt, first, because it’s easy and available, (banks have too much cash), second, because these people’s cash is making money in interest returns, while simply sitting in a bank. So why would they move it?

Add political corruption to the above: one glitch and it all falls apart. Especially since currencies aren’t tied to any objects of value anymore. Like when the U.S. dollar was linked to gold. Their value now thrives on offer and demand. On the trust that the system conveys. And the system, built on fictive foundations is highly vulnerable. 

John Adams said “there are two ways to enslave a nation: one is by the sword, the other is by debt”.

Take the 2008 crash for example. It all started with too much debt. To the point where zero-deposit housing loans were given to big families with a drunk father living in a trailer. All on the basis that the loan is secure since the house can be repossessed and sold. These loans were then sold at expensive rates, since they are of a higher risk, generating much more “profit” for the system. But then too many loans failed. Too many houses were repossessed. And not enough buyers to take them off the market. And so the real estate maket crashed, and all the debt-based system with it… a good old domino effect. 

And look at Greece… The rich man ordered too many “paintings” he never took. And then he asked for his money back. 

Removing interest on bank deposits will make people invest their own money and have actual transactions unweighted by the cost of debt. Debt will then become the exception instead of the rule. And the economy, based on solid foundations, will be healthy. 

Lebanon is on the right track. Having an internationally renowned solid banking system is being used to strengthen the economy at a progressive pace. Which made Standard & Poor’s grant a “Stable” rating to our economy, and a “Stable” rating to our banking system last year. 

And now the central bank will push forward, keeping this momentum. There is no way back now. And interest on cash savings in the bank will have to go down to almost nil over time. Just like any advanced economy in the world today. Profit can then only be made by individuals taking some risk themselves. 

If you can afford to spare some money, buy an adequate Long-Term Insured Savings Plan (there are many on the market. A few honest ones we now know after having been around for 17 years). Then use a Short-Term Bank Saving Account to save whatever else you can, with one or many specific goals based on which you will accumulate enough to invest in real estate, stocks… or any business that is not very demanding time-wise. 

One does not replace the other. You absolutely need to have both long and short term plans. Each, if well designed, does its job perfectly. The bank account in this case will become a safe temporary piggy bank with a smart goal, while you would have insured your ability to work, and secured cash for your future goals. The ultimate one being your retirement, or maybe your children’s education if you have a family. 

Whatever plans you’ve already purchased, keep in mind that the most famous plans are usually the worst. If you’ve heard of it too much, it’s probably not the best one. 

You would also be surprised to know that 98% of people who call themselves “financial advisor” or “consultant” are just salesmen or agents of one company. 

Your best bet is to hire a financial architect. It’s absolutely free.